Keynote Enterprises Private Limited & Another vs SEBI on 4 September 2026

ORDER

Per: Justice P.S. Dinesh Kumar, Presiding Officer

In these appeals1, appellants have challenged the orders passed by the WTM2 and AO3, SEBI4 imposing penalties and 1 (i) Appeal No.509 of 2023 is filed by Keynote Enterprises Private Limited (‘Keynote’ for short) and its Director, Rashesh Purohit (‘Rashesh’ for short) against WTM’s order; (ii) Appeal No.510 of 2023 is filed by Inayata Constructions Private Limited and its Director, Chitra Deshmukh against WTM’s order; (iii) Appeal No.643 of 2023 is filed by Markand Adhikari against AO’s order; and (iv) Appeal No.644 of 2023 is by Anand Shroff and his wife Rupal Anand Shroff against AO’s order.

2 Whole Time Member 3 Adjudicating Officer directing disgorgement for violation of Securities laws. All the appeals are heard together and disposed of by this common order.

2. We have heard Mr. Kunal Katariya, learned Advocate for the appellants in appeal Nos.509 and 643 of 2023, Ms. Komal Bihani, learned Advocate for the appellants in appeal No.510 of 2023, Mr. Shubham Paliwal, learned Advocate for the appellants in appeal No.644 of 2023. Mr. Sumit Rai, learned Advocate for the SEBI.

3. Brief facts of the case are:

i. TV Vision Limited (‘TVVL’ for short) is a company listed on the BSE5 and the NSE6. TVVL made an announcement of down-grading of its long term bank facilities. After the announcement, the share price reduced by 4.99% and closed at ₹119.85. Further, in 22 trading days, it registered a fall of 65.25% and closed at ₹41.20 on 31.10.2017.

ii. SEBI conducted an investigation for the period between 01.09.2017 and 27.09.2017 to ascertain whether certain entities had traded on the basis of any UPSI7.The investigation revealed that:

4 Securities and Exchange Board of India 5 BSE Limited 6 National Stock Exchange of India Limited 7 Unpublished Price Sensitive Information

 The appellant had not issued the ‘No Default Statement’ (‘NDS’ for short) for August, 2017, to the credit rating agency and violated SEBI’s Circular dated 30.06.2017 (‘NDS Circular’ for short) which mandated that NDS must be submitted to the CRA (‘CARE’) on the first working day of every month;  CARE sent emails to TVVL with regard to non- submission of NDS, but TVVL did not submit the same;  On 20.09.2017, CARE collected information from TVVL’s banker8 with respect to the loans availed by TVVL. Since there was default, CARE revised and downgraded TVVL’s rating from ‘CARE BBB- (SO)’ to ‘CARE D’;  On 21.09.2017, CARE informed TVVL about the downgrading, but TVVL disclosed it to the stock exchanges only on 27.09.2017;

iii. According to the SEBI, the information pertaining to downgrading of the credit rating was a ‘price sensitive information’ and the UPSI period was between 01.09.2017 and 27.09.2017.

4. SEBI issued a show cause notice (‘SCN’ for short) dated 25.01.2022 to four Noticees alleging inter alia that:

8 Indian Overseas Bank

(i) Rashesh Purohit9 (‘Rashesh’ for short), one of the Directors of a company called Keynote Enterprises Pvt. Ltd.10 (‘Keynote’ for short) and he was closely related to Markand Adhikari, TVVL’s MD11.

(ii) Both Rashesh and Keynote Enterprises had traded in TVVL’s scrip while in possession of UPSI. Rashesh had sold 89,454 shares and avoided an unlawful loss of ₹38,19,801. Keynote had sold 70,000 shares and avoided an unlawful loss of ₹39,07,796. He had communicated UPSI to his brother Ram Chandra Purohit. Thus, Rashesh and Keynote had violated PIT Regulations; and

(iii) Inayata Constructions Pvt. Ltd.12 (‘Inayata’ for short) is a company controlled by Chitra Deshmukh13 (‘Chitra’ for short). She had professional and business relation with Markand Adhikari and falls within the definition of ‘insider’ under Regulation 2(1)(g)(ii) of PIT Regulations. She had access to the UPSI through Markand Adhikari.

(iv) Inayata sold 1,05,000 shares and avoided an unlawful loss of ₹23,35,826. Thus, Inayata and Chitra had violated PIT Regulations.

9 Noticee No.1 10 Noticee No.2 11 Managing Director 12 Noticee No.3 13 Appellant in Appeal No.510 of 2023

5. Rashesh, Keynote, Inayata and Chitra filed their replies to the SCN. After adjudication, WTM has passed a common order14 imposing a penalty of ₹20 Lakh on Rashesh, ₹10 Lakhs each on Keynote, Inayata and Chitra. WTM has also directed disgorgement of ₹19,14,879/- from Rashesh, ₹24,17,146/- from Keynote and ₹4,04,683 from Inayata. They have been barred from accessing the securities market for six months and restrained from dealing in TVVL securities for one year.

6. The AO, SEBI also initiated separate penalty proceedings and issued an SCN dated 24.05.2022 to seven Noticees (which includes three appellants i.e. Markand Adhikari15, Anand Shroff and his wife16) alleging inter alia that:

(i) Markand Adhikari17 was the Chairman and MD of TVVL. He had communicated the UPSI to Rashesh and Chitra and violated PIT Regulations;

(ii) He had failed to oversee the process of disclosure and failed to ensure timely disclosure of downgrading by CARE and violated Section 23H of the SCRA, 195618; and

(iii) Anand Shroff19, CFO20 of TVVL had communicated the UPSI to his wife Rupal Shroff21, who had sold 8,000

14 Dated 24.03.2023 15 In Appeal No.643 of 2023 16 in Appeal No.644 of 2023 17 Noticee No.1 18 Securities Contract (Regulation) Act, 1956 19 Noticee No.5 20 Chief Financial Officer shares between 19.09.2027 and 27.09.2017. Thus, Anand Shroff and his wife had violated PIT Regulations.

7. The Noticees submitted their replies. After adjudication, the AO has passed the impugned order22 imposing a penalty of ₹25 Lakh on Markand Adhikari, ₹10 Lakh each on Anand Shroff and Rupal Shroff and ₹6 Lakh on TVVL.

8. Learned Advocates appearing for the appellants made following common submissions:

a. That there is enormous delay of 5 years in initiating the proceedings. The alleged trading has taken place in September 2017, whereas SCN has been issued in 2022 and orders have been passed in 2023. The AO has not dealt with appellants’ contention with regard to delay;

b. That there are contradictions and inconsistencies in the orders passed by the AO and the WTM with regard to identifying the UPSI and calculation of UPSI Period. The AO has recorded in para 16 of the order that ‘downgrading of credit rating of long term loan facilities’ is a price sensitive information. Later, the AO has contradicted this finding by holding that UPSI is in two- fold i.e. ‘failure to submit NDS’ and ‘downgrading of credit rating’. This finding is contrary to SCN allegation and introduces a fresh facet of charge which was not put to 21 Appellant in Appeal No.644 of 2023 22 AO’s order dated 31.03.2023

the noticees. The AO has also noted in para 20 of the impugned that CARE’s press release dated 07.09.2017 will not have any bearing on the actual UPSI as nothing has been crystallised by that time so as to hold that UPSI was generally available to the public at large.

c. AO’s order implies that non-submission of NDS is not price sensitive information, whereas WTM holds that downgrading cannot be treated as UPSI in isolation and downgrade must be viewed along with default in submission of NDS because downgrading was the result of non-submission of NDS. Hence, UPSI must begin from the date of non-submission i.e.01.09.2017. In subsequent paragraphs, the WTM has held that the UPSI is the ‘downgrade in the credit rating’ and not the ‘non- submission of NDS’. If non-submission of NDS did not constitute UPSI, the UPSI cannot begin from 01.09.2017 and must begin from 20.09.2017 when the Indian Overseas Bank responded to CARES’s query with respect to loan defaults and ended on 21.09.2017 when CARE issued press release informing the downgrading to public at large.

9. Thus, the learned Advocates contended that there was contradiction between the findings recorded by the WTM and AO. In addition to common submissions, Mr. Kunal Katariya for the appellants in Appeal Nos.64323 and 50924 of 2023 submitted that:

23 Appeal filed by Markand Adhikari assailing AO’s order a. Markand Adhikari was the MD25 of TVVL. The charge against him is ‘alleged communication of UPSI’ to Rashesh, but there is no proof of communication. The impugned orders rely on relationship, financial transactions, alleged frequent communication and trading pattern. There is no direct evidence and the entire case is based on conjectures and surmises;

b. The impugned orders hold Rashesh as an ‘insider’ under Regulation 2(1)(g)(ii) of PIT Regulations on the premise that Markand Adhikari and Rashesh were in frequent communication and they had cordial relation. When charge is levelled under Regulation 2(1)(g)(ii) of PIT Regulations26, in the absence of proof of communication, no presumption can be drawn. Therefore, the AO’s finding with regard to violation of Regulation of 3(1) of PIT Regulations is untenable. In support of this submission, he relied upon Balram Garg v. Union of India27, Affluence Fincon Service Private Limited v.

24 Appeal filed by Keynote and Rashesh assailing WTM’s order 25 Managing Director 26 Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015

SEBI28, Lashit Sanghvi v. SEBI29, Venkataraman Ranganathan v. SEBI30;

c. AO’s order holds that Markand Adhikari communicated UPSI to Chitra and Rashesh. However, the SCN does not set out any such case nor does it disclose the material in support of that finding. Therefore, AO’s order travels beyond the SCN.

10. In addition to common submissions, Ms. Komal Bihani for the appellants in Appeal No.510 of 202331 submitted that:

a. Appellants have traded in the TVVL scrip based on the analysis of financial results and market perception about the Company on the basis of the information available in the public domain. The sale of shares during the alleged UPSI period was only 1.74% of the total shares held by Inayata. Inayata had bought 29,988 shares in pre-UPSI period, 6,000 shares during the UPSI period and 7,000 post UPSI period. Therefore, allegation and finding with regard to access to UPSI is not tenable;

b. SEBI failed to produce any evidence to show that Markand Adhikari had communicated UPSI to Chitra. They had only 28 Appeal No.314 of 2021 decided on 10.10.2024 by the Securities Appellate Tribunal, Mumbai 29 Appeal No.257 of 2023 decided on 02.05.2025 by the Securities Appellate Tribunal, Mumbai 30 Appeal No.69 of 2024 decided on 09.08.2024 by the Securities Appellate Tribunal, Mumbai 31 Appeal filed by Inayata and Chitra professional and business relation. In support of this submission, she relied upon Balram Garg v. Union of India32, Affluence Fincon Service Private Limited v. SEBI33;

c. The impugned orders are passed on an assumption that since Markand Adhikari was a guarantor for the loan availed by VCPL34 in which Chitra was a Director, he had communicated the UPSI. However, no evidence has been produced to establish communication of UPSI by Markand Adhikari to Chitra;

d. SCN alleges that appellants have avoided loss of ₹23.35 Lakhs, whereas in the impugned order, it is reduced to ₹4.04 Lakhs which demonstrates that SCN was issued on assumptions the allegation of ‘insider’ against appellants is without any evidence.

11. In addition to common submissions, Mr. Shubham Paliwal, learned Advocate for appellants in Appeal No.644 of 202335 submitted that:

a. Rupal is Anand Shroff’s wife. Anand Shroff has not traded in the scrip, but he has been found guilty of communicating the UPSI to his wife. Rupal has made

33 Appeal No.314 of 2021 decided on 10.10.2024 by the Securities Appellate Tribunal, Mumbai 34 Vibrant Content Private Limited 35 Appeal filed by Anand Shroff and Rupal Shroff independent analysis of TVVL’s scrip and not traded on the basis of UPSI;

b. SEBI has invoked Regulation 2(i)(g)(ii) of PIT Regulations against Rupal. Therefore, the burden to prove the communication is upon the SEBI and the SEBI has failed to discharge its burden. He relied upon Balram Garg v. Union of India36, Affluence Fincon Service Privater Limited v. SEBI37, Lashit Sanghvi v. SEBI38, Venkataraman Ranganathan v. SEBI39;

12. In reply, Mr. Sumit Rai, learned Advocate for the SEBI submitted that:

a. The chronology of events clearly shows that the ‘rating downgrade’ by CARE was an UPSI. When NDS was not submitted on 01.09.2017, TVVL knew that it could result in the downgrade of its rating. Appellants’ contention that non-submission of NDS was not an UPSI is not tenable because reduction in credit rating has a serious impact on the share price of the company. Non-submission of NDS has been correctly identified as the commencement of UPSI period as TVVL and its management were well aware

37 Appeal No.314 of 2021 decided on 10.10.2024 by the Securities Appellate Tribunal, Mumbai 38 Appeal No.257 of 2023 decided on 02.05.2025 by the Securities Appellate Tribunal, Mumbai 39 Appeal No.69 of 2024 decided on 09.08.2024 by the Securities Appellate Tribunal, Mumbai that it would lead to reduction in rating. Accordingly, 01.09.2017 has been correctly identified as the commencing date of UPSI period;

b. Markand Adhikari was the MD of TVVL and an ‘insider’. The statements of two employees, Anand Shroff and Rakesh Gupta leave no room for doubt that Markand Adhikari was fully aware of the situation of debt servicing obligations and non-submission of NDS. Rakesh Gupta has admitted that the management and Markand Adhikari were aware of the delay in debt servicing obligations and non-submission of NDS;

c. Rashesh is Markand Adhikari’s cousin and they have cordial relation. On 05.09.2017 i.e. during UPSI period, Rashesh has traded in TVVL’s scrip. He borrowed ₹50 Lakhs from Markand Adhikari’s wife, Kanchan Adhikari with his consent. Markand Adhikari was a guarantor for the loans availed by Rashesh’s company. The date-wise trading pattern of Rashesh and Keynote during the UPSI period clearly shows that concentration was only on TVVL scrip. Rashesh has also been charged with the communication of UPSI to his brother, Ram Chandra Purohit;

d. Chitra and Markand Adhikari had cordial relation since 1988 and in touch with each other. Chitra was the Director of Inayata and holding 9.02% share in TVVL. She was a Director of Vibrant Content Private Limited (‘VCPL’ for short), which had financial transactions with TVVL. Markand Adhikari had guaranteed ₹311 Crore loan availed by VCPL in May 2017, close to the UPSI period. These transactions are possible only if individuals are in continuous communication. Chitra has not produced any evidence to show that two of them were not in communication during the UPSI period. Chitra traded during the UPSI period through Inayata. She purchased and sold TVVL’s shares during the UPSI period. Rashesh sold 96.14%, Keynote Enterprises sold 17.84% and Inayata sold 70.53% of their unencumbered shares respectively;

e. Anand Shroff was the CFO of TVVL and he is an ‘insider’. Rupal is his wife and she sold 8000 shares during the UPSI period. Therefore, the presumption under the PIT Regulations is attracted;

f. Appellants’ reliance on Balram Garg v. SEBI40 does not support their case. In that case, the Apex Court41 has reiterated the fundamental principle that whenever circumstantial evidence is relied upon, the foundational facts to support the circumstantial evidence must be proved. Once SEBI presents convincing material or probabilities, the burden shifts on the appellants to prove

41 In paras 50 and 51 of Balram Garg v. SEBI

the contrary. In support of this contention, he relied on Ameen Khwaja v. SEBI42.

13. We have carefully considered rival contentions and perused the records.

14. Undisputed facts of the case are, TVVL is a listed Company. It defaulted in servicing the debt obligations for the month of August, 2017. In terms of SEBI Circular43, TVVL was required to intimate this fact to the Credit Rating Agency (CARE) on the first working day of the following month and this was not done. The Credit Rating Agency collected information from TVVL’s Banker and downgraded TVVL’s credit rating on 21.09.2017 and intimated to TVVL. TVVL intimated this fact to the stock exchange belatedly on 27.09.2017.

15. SEBI’s case is, TVVL had known that there was default on its part in servicing the debt and it would lead to downgrading in its credit rating. TVVL failed to intimate its downgrading to the stock exchange for nearly seven days. In the meanwhile, some ‘insiders’ had traded on the basis of UPSI.

16. SEBI conducted an investigation upon 18 persons/entities. Based on the recommendation in the report, AO proceedings were initiated against 7 and WTM proceedings against 4 persons/entities. Separate SCNs were issued in both the 42 Appeal No.584 of 2019 decided on June 15, 2022 by the Securities Appellate Tribunal, Mumbai 43 Dated 30.06.2017

proceedings. The Noticees filed their replies and participated in the proceedings. Out of 7, AO has imposed penalty against 4 Noticees. Three44 out of them have challenged AO’s order in these appeals. All 4 Noticees45 in WTM proceedings have challenged WTM’s order.

17. Markand Adhikari was the Managing Director of TVVL. CARE was the Credit Rating Agency. In terms of Clause 1(c) NDS Circular46, Credit Rating Agencies are required to seek ‘No Default Statement (NDS)’ from the listed entity (‘TVVL’ in this case). The relevant portion of the Circular reads thus:

“C. „No Default Statement‟ to be sought from the Issuer on a monthly basis:

I. In order to enable timely recognition of default by the CRA, the CRA shall seek a „No Default Statement (NDS)‟ from the Issuer at the end of each month, which shall be provided to the CRA by the Issuer on the first working day of the next month.

II. The NDS shall require the Issuer to explicitly confirm to the CRA that it has not delayed on any payment of interest/ principal in the previous month.

III. In case there have been delays, the Issuers shall state the same in this statement and the CRA shall promptly conduct a rating review and disseminate the rating action through Press Release within 2 days of receipt of such statement.

IV. A standardized format of the NDS is provided at Annexure A.” (Emphasis supplied)

44 Appellants in appeal Nos.643 and 644 of 2023 45 Appellants in Appeal Nos.509 and 510 of 2023 46 SEBI/HO/MIRSD/MIRSD4/CIR/P/2017/71 dated 30.06.2017

18. In the instant case, TVVL did not provide the NDS, compelling CARE to collect the information from its Banker. Based on Banker’s information, CARE downgraded TVVL’s credit rating on 21.09.2017 and web hosted on the same day. Simultaneously, CARE conveyed it to TVVL. SEBI’s contention is, TVVL had not serviced its debt obligation and that could lead to downgrading and this is an unpublished price sensitive information. TVVL did not furnish NDS on 01.09.2017 in compliance with SEBI’s Circular. Therefore, the period between 01.09.2017 and 21.09.2017 is ‘UPSI period’.

19. Anand Shroff was the CFO of TVVL and Rupal is his wife. Markand Adhikari and Anand Shroff have not traded, whereas Rupal has traded in TVVL shares.

20. Rashesh is a Director of Keynote. Markand Adhikari’s mother and Rashesh’s father are siblings. Rashesh has borrowed ₹50 Lakhs from Markand Adhikari’s wife on 05.09.2017 and on the same day, he has sold 35,696 shares on the NSE and 8,758 shares on the BSE. In the entire UPSI period, Rashesh has sold 89,454 shares and his company, Keynote has sold 70,000 shares.

21. Chitra is a Director in Inayata. Inayata has sold 1,05,000 shares during the UPSI period.

22. It is alleged that Markand Adhikari had conveyed the UPSI to Rashesh and Chitra; and Anand Shroff had conveyed it to his wife. It is also alleged that Rashesh conveyed the UPSI to his brother, Ram Chandra Purohit. Ram Chandra Purohit was working in ATPL47 and that Company had also traded during the UPSI period. We may record that Ram Chandra Purohit was a Noticee in the AO proceedings and it has been held that the trades were outside the UPSI period.

23. The specific allegation against Markand Adhikari is violation of Regulation 3(1) of PIT Regulations (conveying UPSI to Rashesh and Chitra) and violation of SEBI (LODR) Regulations48, 2015 (non-disclosures). It was argued that SEBI has not proved any specific communication between him and Rashesh or Chitra. Mr. Rai urged that close family relation between Markand Adhikari and Rashesh and long standing professional and financial relation with Chitra are strong circumstances which establish that their trades were based on the UPSI. He submitted that Rashesh had taken a loan of ₹50 Lakhs from Markand Adhikari’s wife. This transaction is not denied by the appellants. With regard to Chitra, he submitted that Markand Adhikari had guaranteed a loan availed by her.

24. ‘UPSI’ is defined as follows in PIT Regulations: “Regulation 2(1)(n): ‘unpublished price sensitive information’ m means any information, relating to a company or its securities, directly or indirectly, that is not generally available which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to the following:

47 Asset Trading Private Limited 48 SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015

(i) financial results;

(ii) dividends;

(iii) change in capital structure;

(iv) mergers, de-mergers, acquisitions, delistings, disposals and expansion of business and such other transactions;

(v) changes in key managerial personnel.

(vi) material events in accordance with the listing agreement. NOTE: It is intended that information relating to a company or securities, that is not generally available would be unpublished price sensitive information if it is likely to materially affect the price upon coming into the public domain. The types of matters that would ordinarily give rise to unpublished price sensitive information have been listed above to give illustrative guidance of unpublished price sensitive information.”

25. Admitted position is, TVVL had not serviced its debt obligations and did not intimate the Credit Rating Agency (CARE) on 01.09.2017. Credit rate is an important and relevant factor considered by the investors to take informed decisions. CARE downgraded TVVL’s credit rating on 21.09.2017. Therefore, in our considered view, both AO and WTM have rightly held the period between 01.09.2017 and 21.09.2017 as the ‘UPSI period’.

26. Markand Adhikari being the Managing Director falls within the definition of an ‘insider’ under Regulation 2(1)(g)(i) of PIT Regulations49. The question is, whether he has conveyed the UPSI. Neither the AO nor the WTM have recorded any express finding with regard to any proof of his conveying the UPSI to 49 SEBI (Prohibition of Insider Trading) Regulations, 2015

Rashesh or Chitra. The AO has held that Markand Adhikari has violated PIT Regulations on the basis of his family relation with Rashesh and professional relation with Chitra. The trading pattern of Rashesh and Keynote recorded in the impugned orders are as follows:

Noticee no. 1- Mr. Rashesh Purohit Table no. 1 (Page 6 of WTM order) Date BSE/NSE Gross Buy Qty. Gross Sell Qty. Net Traded Qty. Gross Buy Value (INR) Gross Sell Value (INR)

35,696 -35,696 0.00 53,54,400/- 05/09/2017 BSE

8,758 -8,758 0.00 13,13,700 18/09/2017 NSE

25,000 -25,000 0.00 43,75,000 18/09/2017 NSE

20,000 -20,000 0.00 35,00,000 Total

89,454 -89,454 0.00 1,45,43,100

Noticee no. 2- Keynote Enterprises Private Limited Table no. 2 Date BSE/NSE Gross Buy Qty. Gross Sell Qty. Net Traded Qty. Gross Buy Value (INR) Gross Sell Value (INR) During UPSI period-September 01, 2017 to September 27, 2017 13/09/2017 BSE

10,000 -10,000 0.00 17,49,000/- 14/09/2017 BSE

10,000 -10,000 0.00 18,00,000/- 18/09/2017 BSE

10,000 -10,000 0.00 17,50,005/- 18/09/2017 NSE

40,000 -40,000 0.00 70,00,041 Total

70,000 -70,000 0.00 1,22,99,046

27. The specific allegation in the SCN against Rashesh and Chitra is that they fall under Regulation 2(1)(g)(ii) of PIT Regulations i.e. that they were in possession of or having access to UPSI. The said provision reads as follows:

“Regulation 2(1)(g):

i) a connected person; or

ii) in possession of or having access to unpublished price sensitive information.”

28. When a person is charged under Regulation 2(1)(g)(ii), Regulation 4(2) of PIT Regulations casts the burden of proof upon the SEBI and it reads as follows:

“Regulation 4

(1) xxxxxxxxxxxx

(2) the case of connected persons the onus of establishing, that they were not in possession of unpublished price sensitive information, shall be on such connected persons and in other cases, the onus would be on the Board.”

29. Both AO and WTM have held that Rashesh and Chitra were in possession of UPSI on the premise that Rashesh is a relative and he had financial transaction; Chitra had a professional relation with Markand Adhikari and he had guaranteed her loan. The said reasons are mere statements of facts and do not prove that Rashesh and Chitra were in possession of UPSI even by applying the principle of preponderance of probability. Therefore, we have analysed their trades which are as follows:

Noticee no. 1- Mr. Rashesh Purohit Table no.1 Date BSE/NSE Gross Buy Qty. Gross Sell Qty. Net Traded Qty. Gross Buy Value (INR) Gross Sell Value (INR)

35,696 -35,696 0.00 53,54,400/- 05/09/2017 BSE

8,758 -8,758 0.00 13,13,700 18/09/2017 NSE

25,000 -25,000 0.00 43,75,000 18/09/2017 NSE

20,000 -20,000 0.00 35,00,000 Total

89,454 -89,454 0.00 1,45,43,100

Noticee no. 2- Keynote Enterprises Private Limited Table no.2 Date BSE/NSE Gross Buy Qty. Gross Sell Qty. Net Traded Qty. Gross Buy Value (INR) Gross Sell Value (INR) During UPSI period-September 01, 2017 to September 27, 2017 13/09/2017 BSE

10,000 -10,000 0.00 17,49,000/- 14/09/2017 BSE

10,000 -10,000 0.00 18,00,000/- 18/09/2017 BSE

10,000 -10,000 0.00 17,50,005/- 18/09/2017 NSE

40,000 -40,000 0.00 70,00,041 Total

70,000 -70,000 0.00 1,22,99,046

Noticee no. 3- Inayata Constructions Private Limited Table no.3 Date BSE/NSE Gross Buy Qty. Gross Sell Qty. Net Traded Qty. Gross Buy Value (INR) Gross Sell Value (INR)

50,000 -50,000 0 75,000,12 15/09/2017 BSE 6,000

10,53,000 0.00 18/09/2017 NSE

5,000 -5,000

8,75,001 25/09/2017 BSE 7,000

9,87,700 0.00

25/09/2017 NSE

35,000 -35,000 0 49,00,000/- 26/09/2017 NSE

15,000 -15,000 0 21,30,013 Total 13,000 1,05,000 -92,000 20,40,700 1,54,05,026

30. We have already held that UPSI period was between 01.09.2017 and 21.09.2017.

31. The details of trades show that Rashesh has sold 89,454 shares during the UPSI period on two different dates. Out of the total number, he has sold 45,000 shares which is about 50% of the total quantity on 18.09.2017. Similarly, his company, Keynote has sold 70,000 shares between 13 and 18 September, 2017.

32. Inayata has sold 50,000 shares on 05.09.2017, bought 6000 shares on 15.09.2017 and sold 5000 on 18.09.2017. It is relevant to note that Inayata has sold 35,000 shares on 25.09.2017 and 15,000 shares on 26.09.2017, after the UPSI period which account for nearly 50% of total sale of 1,05,000 shares.

33. In our considered opinion, the charge of trading in TVVL scrips while in possession of UPSI against Rashesh, Keynote, Inayata and Chitra are not sustainable, firstly because SEBI has not discharged its burden of proving that they were in possession of UPSI. Secondly, because except relying upon the family and personal relation; and financial transactions, the impugned orders do not record any proof of communication, as required in case of ‘insider’ under Regulation 2(1)(g)(ii).

34. In view of the above findings, the charge of communicating UPSI against Markand Adhikari fails.

35. The remaining person who has traded in the scrip is Rupal Shroff. Admittedly, her husband, Anand Shroff was the CFO of TVVL and falls within the definition of ‘connected person’ under Regulation 2(1)(d) of the PIT Regulations which reads as follows:

“2(1)(d) "connected person" means,-

(i) any person who is or has been, during the six months prior to the concerned act, associated with a company, in any capacity, directly or indirectly, including by reason of frequent communication with its officers or by being in any contractual, fiduciary or employment relationship or by being a director, officer or an employee of the company or holds any position including a professional or business relationship, whether temporary or permanent, with the company, that allows such a person, directly or indirectly, access to unpublished price sensitive information or is reasonably expected to allow such access.

(ii) Without prejudice to the generality of the foregoing, the persons falling within the following categories shall be deemed to be connected persons unless the contrary is established, - (a) relative of connected persons specified in clause (i); or (b) xxxxxxx”

(Emphasis Supplied)

36. In terms of Regulation 2(1)(hc)(i), spouse of a person is a ‘relative’ and a ‘relative’ of a connected person shall be ‘deemed to be a connected person’ as per definition in Regulation

2(1)(d)(ii)(a). Therefore, Rupal is a connected person and falls within the definition of Regulation 2(1)(g)(i) of PIT Regulations.

37. The AO has held in para 46 of the impugned order that the CFO, Anand Shroff was undeniably in possession of UPSI. As noted above, his wife Rupal also falls within the definition of a ‘connected person’.

38. Rupal Shroff’s trades are as follows:

Date Exchange Scrip Buy Qty. Buy traded value(Rs.) Sell Qty. Sell traded value(Rs.) Pre-UPSI (June 01, 2017 – August 31, 2017)

UPSI (September 01, 2017 – September 21, 2017) 19/09/2017 NSE TVVISION

1,50

2,56,546 19/09/2017 BSE TVVISION

3,03,530 Post UPSI (September 22, 2017 – December 28, 2017) 22/09/2017 NSE TVVISION

1,19

1,70,557 22/09/2017 BSE TVVISION

1,00,433 25/09/2017 NSE TVVISION

1,25

1,75,000 25/09/2017 BSE TVVISION

80,640 27/09/2017 BSE TVVISION

12,674 27/09/2017 NSE TVVISIO N 0

1,15,498

Figures have been revised in the aforesaid tables as per revised UPSI period considered from September 01, 2017-September 21, 2017 and post UPSI period has been considered from September 22, 2017 to December 28, 2017

39. The above table shows that Rupal Shroff has sold 3,270 shares on 19.09.2017 which is within the UPSI period. The charge against Anand Shroff is, he was an ‘insider’ and communicated the UPSI to his wife in violation of Regulation 3(1)

of PIT Regulations. Rupal Shroff’s trades show that she has sold her shares within the UPSI period. Her source of information is obviously her husband. The AO has held in para 48 of the impugned order that it is logical to conclude that Anand Shroff communicated UPSI to his spouse and we find no error in the said finding. The charge against Rupal Shroff is also established as she being a ‘connected person’ has sold 3,270 shares during the UPSI period.

40. It is alleged against Markand Adhikari that he being the MD and on Board of TVVL had failed to ensure compliance with Regulation 4(2)(f)(8) of SEBI (LODR) Regulations, 2015 as he was responsible to oversee. Admitted position is, NDS was not furnished to the Credit Rating Agency on 01.09.2017. CARE downgraded and intimated it to TVVL on 21.09.2017 and TVVL disclosed it to stock exchanges belatedly on 27.09.2017. In view of this admitted factual matrix, we find no error in AO’s findings qua Markand Adhikari. The other charge against Markand Adhikari is violation of PIT Regulations and we have held that the same is not sustainable.

41. In the lights of the above facts and our findings, the following:

ORDER

1. Appeal No.509 and 510 of 2023 are allowed.

2. Order dated 24.03.2023 passed by the WTM, SEBI is set aside.

3. Appeal No.643 of 2023 is allowed in part. The violation under PIT Regulations is set aside qua the appellant. Remaining portion of the order is undisturbed. Penalty under Section 23H of SCRA is upheld.

4. Appeal No.644 of 2023 is dismissed.

5. Pending interlocutory application(s), if any, stand disposed of.

6. No costs.

Justice P.S. Dinesh Kumar Presiding Officer

Ms. Meera Swarup Technical Member

Dr. Dheeraj Bhatnagar Technical Member

04.09.2026 RHN RAJALA KSHMI H NAIR Digitally signed by RAJALAKSHMI H NAIR Date: 2026.09.04 13:33:07 +05'30'